The last major independent British dotcom business succumbed to America's online hegemony yesterday as Lastminute.com accepted a £577m takeover by Sabre Holdings, owner of US rival Travelocity.

The 165p-a-share deal brings to a close a five-year saga which saw Lastminute's founders Martha Lane Fox and Brent Hoberman become pin-ups for a generation of internet entrepreneurs.

Many of their contemporaries from the self-styled "neterati" saw their investments vaporise as the dotcom bubble burst just after Lastminute floated in March 2000, but the founders of the online travel business will scoop almost £40m from yesterday's deal.

Mr Hoberman, still the company's chief executive, said yesterday that he saw the deal as another chapter in the story of Lastminute. "I'm still standing. I am going to stay to run the [combined] business," he said. "I would hope that www.Lastminute.com will remain as an iconic UK dotcom."

It seems unlikely, however, that Ms Lane Fox, who quit as the company's managing director in late 2003, but remained as a non-executive director, will have a major role in the combined business.

Ms Lane Fox, who was badly injured in a car crash while on holiday in Morocco a year ago, will have to resign her directorship when the deal is completed. Mr Hoberman suggested she could retain some link with the business: "If Martha wants to have an advisory role in the business then I would love it."

Over the five years of its existence, the business the two friends founded while working at internet consultancy Spectrum Strategy has eaten up more than a dozen of its rivals. Along the way it has amassed pre-tax losses of over £250m and its share price has never regained the heady heights reached on its first day on the London Stock Exchange, March 14 2000.

Retail investors, who had been restricted to just 35 shares each in the open offer, piled into the stock when it joined the market at 380p. The shares rocketed to a high of 555p, valuing the business, which was a mere 19 months old at the time and had hardly any revenues, at £835m and the stakes held by its founders at over £150m.

The dotcom bubble burst just days after Lastminute came to market and a combination of missed earnings targets and cynicism about internet stocks left the stock at an all-time low of 17p just over a year and a half later.

Yesterday's take-out price would leave any retail punter who bought in the flotation and stuck with the business seriously out of pocket. But Mr Hoberman said that despite its falls, the share price has outperformed other tech stocks.

"The share price at this price has outperformed the Nasdaq and the Techmark indices. I think it is a bit unhelpful to take that one date in time (the flotation) and say that's the way we judge your business," he hit back.

In fact, some in the City believe there could still be a counter-bid for the business, although its shares closed yesterday just half a penny higher than Sabre's offer, suggesting hopes are not very high. Under the terms of yesterday's deal Lastminute is not allowed to solicit other offers and if another bidder is successful it will have to pay Sabre £5m.

Expedia, owned by American online conglomerate IAC/InterActiveCorp and TUI, owner of Lunn Poly, are both seen as possibly interested in Lastminute. Another potential bidder, Cendant, owner of US travel site Orbitz and the Budget car rental chain, is likely to have its hands full integrating last year's purchase of UK-based ebookers.

Travelocity's management remained unconcerned about the prospects of another bid emerging for Lastminute last night while Mr Hoberman admitted that "the door is still open" should anyone else want to bid.

Evolution Securities analyst Robin Chhabra described the Sabre offer as "fair but not generous", valuing the business at roughly the same as Cendant's acquisition of ebookers last year.

"We would argue that Lastminute deserves to be valued at a premium to ebookers given its scale and brand strength," he added, suggesting a valuation at closer to 200p per share.

If Sabre does secure control of Lastminute it will leave the UK online travel market looking very similar to the US market with Expedia, a combined Lastminute/Travelocity and Cendant's ebookers taking up the top three positions. The American market is dominated by Expedia, Travelocity and Cendant's Orbitz business.

The British and wider European online travel market is attractive to US businesses as not only is it growing faster than the American market, but it is more fragmented. The Lastminute.com name will remain as a feature of the online world, Travelocity's president and chief executive officer Michelle Peluso stressed yesterday.

"Our intention is to look country by country," when deciding whether to use the Lastminute or Travelocity name, but she intends to "establish Lastminute.com as the leading brand across Europe."

Lastminute sells flights, holidays and hotel accommodation across 13 European countries. Yesterday the company reported yet another widening of pre-tax losses to £45m at the half-year stage, although on the basis of profits before all financial charges the company made a mere £100,000.

Travelocity, in contrast, is part of the multibillion-dollar Sabre Holdings conglomerate. It has been in and out of the European market but now operates in France, Scandinavia and Germany, where it has a joint venture, and has a European base in Britain.

Linking Travelocity with Lastminute, which was last year forced to cut 15% of its workforce to reduce costs, will produce cost benefits, Ms Peluso admitted, but she could not speculate on jobs.